Failed landfill tax-fraud probe cost more than £3m

A failed investigation into alleged tax fraud at landfill sites cost more than £3m, it has been revealed.

Fourteen people were arrested in raids across the north-east of England and Yorkshire in September 2015.

At the time, HM Revenue and Customs (HMRC) estimated an alleged fraud of £78m, but its six-and-a-half year probe ended without anyone being charged.

The National Audit Office (NAO) said the investigation had "significant weaknesses".

Operators of landfill sites are required to pay landfill tax on anything left on their site as disposed waste, with exemptions for certain materials in some circumstances.

Waste management firm Niramax, which has offices in Hartlepool and Washington, was among businesses raided as part of Operation Nosedive in 2015.

Another search took place at Octagon Green Solutions, which at the time operated in Blaydon as one of Niramax's associated companies. It is now run by a different firm under a new name, Recylogical.

Raids were also carried out in Leeds and Hull.

North Durham MP Kevan Jones and David Davis, who represents Haltemprice and Howden in Yorkshire in Parliament, wrote to the NAO to query HMRC's handling of the investigation.

In its response, it revealed the "cost of the staff assigned to the dedicated Operation Nosedive case team to be around £3.5m".

While HMRC deals with tax collection, the Environment Agency's focus is on waste management and the NAO said "a number of weaknesses" in the investigation stemmed from the challenge the organisations faced "in discharging their different responsibilities for landfill tax".

It said the impact of those shortcomings "only became apparent in the later stages of the investigation".

The problems with the probe raise "wider questions about how government co-ordinates its oversight of and intervention with landfill operators", it added.

Mr Jones said he was calling for a further investigation "into what went wrong".

He told BBC Look North: "They basically wasted £3.5m of public money over six years to get nothing.

"Remember when they first did the raid on Niramax? They claimed this was a fraud worth £78m and then it all went silent for six years."

HMRC said the case had been "the first of its kind" and it had carried out two reviews to learn lessons with changes implemented meaning "a case like this would be handled more effectively now".

Niramax was approached for comment by the BBC but did not reply.

In an unrelated investigation, Niramax's former managing director, Neil Elliott, was jailed for 15 years in March 2020 after being convicted of manslaughter over the death of a man in Hartlepool.